To: faqsnlojiks who wrote (26098 ) 6/19/2001 7:19:59 PM From: Roger Sherman Respond to A few excerpts from the actual "complaint"...EXCERPTS FROM THE LAWSUIT FROM PG. 2: Thereafter, as the extent of Defendants' accounting chicanery and other false statements reached the market, the price of InfoSpace shares continued to decline, reaching $2 1/4 per share on April 6, 2001. When it was revealed that InfoSpace's financial statements had been overstated as a result of Defendants' refusal to pay its employees overtime they were legally owed and record a liability in connection therewith. During the Class Period Defendants concealed InfoSpace's true operating performance in order to artificially inflate the market price of InfoSpace securities. Each of the releases, SEC filings, and other statements by Defendants participating herein was false and misleading, as it misrepresented and/or failed to disclose that Defendants had caused InfoSpace to overstate its financial performance, during the Class Period in violation of Generally Accepted Accounting Principals ("GAAP") by, among other things, artificially inflating InfoSpace's expenses while knowingly misrepresenting Defendants' FY2001 revenues and earnings estimates.>/i>FROM PGS. 7-8: Defendants' January 2000 statements were false and misleading when made. The true facts which were then know to Defendants based upon their review of internal InfoSpace data were: FROM PG. 10: To facilitate the acquisition of Go2Net, InfoSpace filed with the SEC a Registration Statement on Form S-4 on September 8, 2000. This Registration Statement contained the company's financial statement for the year ending December 31, 1999 and the six month period ending June 30, 2000, and was therefore false and misleading for the same reasons identified in (paragraph) 26 above. FROM PG. 15: STATUTORY SAFE HARBOR The statutory safe harbor provided for forward-looking statements under certain circumstances does not apply to the allegedly false statements pleaded in the complaint, as the statutory safe harbor does not apply to the Defendants' misrepresentations of the currently existing or historical facts, including Defendants' dissemination of false statements regarding InfoSpace's reported financial results. FROM PG. 17: Defendants Acted with Scienter At relevant times, InfoSpace and defendant Jain had actual knowledge that the statements and documents complained herein were materially false and misleading as set forth herein and intended to deceive plaintiff and the other members of the Class. In the alternative, Defendant acted with deliberate reckless disregard for the truth in that they failed or refused to ascertain and disclose such facts as would have revealed the materially false and misleading nature of statements and documents complained herein, although such facts were readily available to Defendants. Said facts and omissions of Defendants were committed willfully or with deliberate disregard for the truth. In addition, InfoSpace and defendant Jain knew or deliberately disregarded that material facts were being misrepresented or omitted as alleged herein. Information showing that the Defendants acted knowingly or with reckless disregard for the truth is peculiarly within Defendants' knowledge and control. As the senior corporate officer of InfoSpace, defendant Jain had knowledge of the details of the Company's financial affairs and results. Plaintiff, who purchased InfoSpace common stock on the open market, does not have knowledge of the details of the Company's internal corporate affairs. FROM PG. 19: Against Defendant Jain for Violations of 20(a) of the Exchange Act Throughout the Class Period defendant Jain, by reason of his executive position and position as Chairman of the Board, and as the owner directly and indirectly of millions of shares of the company's common stock, had the power and influence and exercised the same, to cause the Company to engage in unlawful practices complained herein. As a result, at the time of the wrongs alleged herein defendant Jain was a "controlling person" of the Company within the meaning of 20(a) of the Exchange Act. PRAYER FOR RELIEF WHEREFORE plaintiff and the Class pray for judgment as follows:
